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The Power of the GuideStar Database

Introduction

GuideStar's National Database of Nonprofit Organizations offers users a wealth of information about American nonprofit organizations. It is the nation's most comprehensive source of data about U.S. nonprofits the Internal Revenue Service has declared tax exempt under Section 501(c) of the U.S. Tax Code.

The breadth and depth of the GuideStar database are unmatched. Most watchdog groups list a few hundred organizations, and state charities officials and nonprofit associations focus on the organizations in their respective states and regions. In contrast, the GuideStar database contains information about every public charity, private foundation, and other 501(c) organizations to which contributions may be tax deductible, more than 850,000 nonprofits in all. (For a discussion of the differences between private foundations and public charities, see "Just What Are Public Charities and Private Foundations, Anyway?")

Small organizations stand on equal footing with large nonprofits in the GuideStar database, and information on rural groups is as accessible as data on urban organizations. In addition to financial data, the GuideStar database contains information about the missions and programs of thousands of nonprofits.

GuideStar obtains information on the organizations in the database from three main sources: the IRS Business Master File (BMF), IRS Forms 990 and 990-EZ, and the nonprofits themselves. The source of the data on a specific nonprofit organization determines the completeness of that nonprofit's GuideStar Report.

Information from the BMF

GuideStar Report based on the BMF contain the least information. The BMF includes only basic data about charitable organizations: name; address; employer identification number (EIN); gross income; assets; ruling year; fiscal year; mission; whether it files a Form 990, 990-EZ, or 990-PF; and, sometimes, NTEE code.

The Internal Revenue Service updates the BMF 10-11 times a year. GuideStar compares each update to the previous version, adding any new public charities or private foundations to the database and updating organizations' addresses and financial information.

We do not, however, automatically delete from the database organizations that have disappeared from the BMF. Instead, we double-check the organization's name against the Internal Revenue Bulletin, a weekly IRS publication that lists organizations that have recently lost 501(c) status.

We remove an organization from the GuideStar database only after (a) it appears in the Internal Revenue Bulletin or (b) we receive proof of its demise, such as official notification from the organization.

 

Information from Forms 990, 990-EZ, and 990-PF

All public charities with incomes of more than $25,000—approximately 250,000 organizations, or about one-third of all public charities—must file a Form 990 or 990-EZ with the IRS. Every private foundation, regardless of income, must file a Form 990-PF; there are approximately 65,000 private foundations in the GuideStar database at this time.

Working in collaboration with the National Center for Charitable Statistics (NCCS), GuideStar receives images of these financial reporting forms directly from the IRS, then posts them on the GuideStar and NCCS Web sites. GuideStar users can link to the image of an organization's 990 from the nonprofit's GuideStar Report.

To protect individuals' privacy, the IRS masks (obscures from view on the 990 images) the names of donors that appear on Forms 990 and 990-EZ (but not on Forms 990-PF). GuideStar staff members mask the signatures and Social Security numbers of the persons who prepared the 990s.

The following information may also be masked on the 990 images:

 

  • Other signatures and Social Security numbers
  • Street addresses of private residences
  • Street addresses of certain organizations, such as battered women's shelters
  • Names of individuals receiving hardship scholarships, treatment for sexually transmitted diseases, or other services

Neither GuideStar nor the IRS, however, will mask other information on the 990s.

In addition to posting the 990 images, GuideStar—again in collaboration with the NCCS—digitizes more than 300 fields on the 990 and 990-EZ and adds this information to the database. On average, GuideStar digitizes the forms within two months of receiving them from the IRS.

GuideStar Report based on digitized 990s or 990-EZs are more complete than those compiled from the BMF. In addition to providing financial information, the filing organization must list its exempt purpose and the achievements of its four largest programs. GuideStar transfers financial information to the nonprofit's financials page and the exempt purpose and achievements data to its mission and programs page.

Ensuring the Accuracy of Digitized 990 Data

GuideStar goes to great lengths to ensure the quality and accuracy of its database. GuideStar captures data from literally hundreds of thousands of forms, with more than 100 million key-entered values each year. The objective of GuideStar's data capture program is to capture values exactly as they are input by the organization or paid preparer for each Form 990 or Form 990-EZ. To that end, every numerical valued displayed on the GuideStar site is entered twice and any disparity between entered values is reconciled. GuideStar quality assurance staff regularly monitors the accuracy of this "double-keyed" data. The numerical fields in the GuideStar database are captured accurately at the 99.9 percent level.

Further, GuideStar finds that charities themselves infrequently make errors on the major financial sections of their Forms 990. GuideStar's Quality Assurance staff has found organization-entry errors in only 0.2 percent of the fields entered. In 30 percent of these cases, such errors result from the preparer's failure to transfer a value, which had been established elsewhere on the document, into a required field (leaving the field blank) and do not reflect erroneous data or suggest any intention to misinform.

The Accuracy of 990 Data in General

Some individuals inside and outside the nonprofit sector have questioned the accuracy of Form 990 data. Last year, Karen A. Froelich and Terry W. Knoepfle of North Dakota State University and Tom Pollak of the NCCS compared organizations' 990s to their audited financial statements. The researchers concluded, "The IRS 990 Return is a reliable source of information for basic income statement and balance sheet entries."

Froelich, Knoepfle, and Pollack also maintained that the Form 990 is "potentially more useful than financial statements for study of nonprofit organizations. In addition to the standardized information collected over time and across organizations, precise specification of revenue sources and required allocation of expenses into program, management, and fundraising categories can provide revealing detail not often available in the financial statements." ("Financial Measures in Nonprofit Organization Research: Comparing IRS Form 990 Return and Audited Financial Statement Data," Nonprofit Quarterly 29 [2000]: 232-254.)

Posting the Most Current 990s

GuideStar users often ask why we don't have an image of an organization's "most recent" 990 in its GuideStar Report. Usually, the latest Form 990 image you see for an organization is the most current one available.

Unlike the well-known April 15 deadline for filing personal income tax returns, there is no one date on which all Forms 990 for a particular year must be submitted to the IRS. Instead, each nonprofit organization is required to file by the 15th day of the 5th month after the end of its fiscal year. Because the exact dates of a fiscal year vary from nonprofit to nonprofit, the filing dates for the 990s vary, too.

Organizations can also receive up to two 90-day extensions of time to file. (Like the 990, the extension request form is a public document and is posted on the GuideStar site.) Thus, the Form 990 for a nonprofit whose fiscal year ended on December 31, 2000, might not be filed until November 15, 2001:

Accounting Period 990 Due Date Due Date with 1 Extension Due Date with 2nd Extension
1/1/00-12/31/00 5/15/01 8/15/01 11/15/01


The IRS processes the 990s before it forwards images of the forms to GuideStar. We do not, however, hold the 990 and 990-EZ images until they have been digitized; posting the images and digitizing the information on the forms are separate processes.

Information from the Nonprofits Themselves

GuideStar invites nonprofit organizations to enhance their GuideStar Report by providing information about their missions, programs, services, accomplishments, goals, needs, and volunteer opportunities. Nonprofits that do not file a Form 990 can also fill out a basic financial statement modeled after the 990. (All financial data for organizations that do file a 990 or 990-EZ are taken directly from those forms.)

Organizations that provide this information to GuideStar are called GuideStar Participants. The only cost to the nonprofits is the time it takes them to register with GuideStar and complete an online questionnaire. Participants' GuideStar Report are the most complete reports in the database.

To date, nearly 35,000 charitable organizations—more nonprofits than the number that participate in all state nonprofit associationscombined—have taken advantage of the opportunity to post their information at GuideStar. Their participation levels the nonprofit playing field by enabling organizations of all sizes—those that file 990s and those that do not—to speak directly to donors and funders.

Many GuideStar participants report that they have benefited greatly from taking the time to update their GuideStar Report; some have received substantial donations and grants as a result of making their information available on GuideStar. Donors note that having mission and program information available to them makes it easier to determine which organizations they wish to support.

Nonprofit participation is the strength of the GuideStar database. To offer a complete picture of the nonprofit sector, GuideStar will continue its efforts—and implement new initiatives—to gain the participation of even more charitable organizations in the country.

The preceding post is by GuideStar staff members Chuck McLean, Elizabeth M. Schmidt, and Suzanne E. Coffman.

Topics: GuideStar GuideStar database